Chemed(CHE) - 2022 Q4 - Annual Report

Employee and Talent Management - As of December 31, 2022, the company had a total of 14,167 employees across its subsidiaries Roto-Rooter and VITAS[132]. - The company recognizes the importance of attracting and retaining top talent, particularly in the challenging labor market during the COVID-19 pandemic[136]. - A nationwide shortage of qualified nurses and aides could adversely affect VITAS' profitability and service quality[155]. Environmental and Regulatory Liabilities - The company's estimated liability for potential environmental cleanup related to the 1991 sale of DuBois Chemicals Inc. is $1.7 million, with a maximum contingent liability of$14.9 million[130]. - The company is contingently liable for additional environmental cleanup costs but does not believe it is probable that these costs will be incurred[130]. - The company has obligations under a corporate integrity agreement with the OIG, which includes compliance monitoring and reporting requirements[121]. Competition and Market Dynamics - The company faces intense competition in the plumbing and restoration businesses, primarily competing on service range, name recognition, and customer service quality[143]. - The healthcare industry is highly competitive, with VITAS competing against numerous organizations in its service areas[156]. - VITAS faces increasing pressure from payors to control healthcare costs, which may impact revenue levels[148]. Financial Performance and Revenue Sources - Over 90% of VITAS' net patient service revenue comes from Medicare and Medicaid payments, which are primarily on a "per diem" basis[148]. - 15% to 20% of VITAS' days of care are provided to patients in nursing homes, and changes in payment laws could reduce net patient service revenue[149]. - The reduction or elimination of Medicare and Medicaid payments for hospice patients in nursing homes would negatively impact VITAS' revenue and profitability[150]. - VITAS' success relies heavily on maintaining relationships with patient referral sources, which have been affected by the pandemic[151]. - Federal and state regulations could require VITAS to invest significantly in new information systems, potentially impacting profitability[153]. Acquisitions and Investments - The company has not completed any acquisitions in 2021[140]. - VITAS acquired hospice assets from a Florida provider for $1.24 million in cash in 2022[161]. Cybersecurity and Safety Measures - The company has implemented cybersecurity measures, including intrusion detection and regular testing of IT systems, to protect sensitive customer information[147]. - The company has developed a safety program for VITAS to ensure employee and patient health during the COVID-19 pandemic, including training on hygiene and PPE usage[135]. Debt and Financial Obligations - The market value of the company's long-term debt at December 31, 2022, is approximately$97.5 million, with all outstanding debt at a variable interest rate[694]. - The company is subject to civil monetary penalties ranging from $20,000 to$100,000 per claim for knowingly submitting improperly filed claims for federal health benefits[126].